Hybrid Sales Collapse

January 6th, 2009 at 8:21am

Car sales were dismal in December, but guess which part of the market suffered the most? While the overall market fell to 35%, sales of hybrids were down nearly 43%. Contrast that to only six months ago when hybrids were so hot you practically couldn’t buy one.

Especially hard hit were the most popular hybrids out there. The Toyota Prius was down nearly 45%, the Honda Civic hybrid was down 67%.

Two factors are to blame for this. First, with gasoline prices half of what they were last summer consumers are not as worried about fuel economy. Second, with the economy in a full-blown recession consumers are looking for cheaper alternatives to pricey hybrids.

None of this bodes well for automakers who are about to cram their showrooms chock full of hybrids in the next couple of years. That is, not as long as gasoline prices stay as cheap as they are.

9 Comments to “Hybrid Sales Collapse”

  1. Tom Martin Says:

    Hybrid new car sales collapsed, but the used prices have held steady.

    I still believe that a 3-5 year old hybrid is vastly overpriced. Many of these vehicles are halfway to a $3K-$5K replacement battery. That’s more than replacing an IC engine.

  2. John Says:

    Tom,

    I agree . Anyone that has purchased a cordless drill to only find out later that it is more economic to throw it away than to buy a new replacement battery has felt the “battery pain”.

    GM really needs to get ahead of this with the Volt. A hidden profit center won’t be a big selling feature.

    Once all the green tree huggers with an extra $40K fill their garages, this battery issue will be front and center with potential buyers.

  3. Tom Martin Says:

    And with a shortage in batteries, I don’t see prices declining much. Prices won’t sigificaqntly decline until companies manufacture too many batteries.

  4. Tom L Says:

    I have a question about battery life that I don’t believe I have ever seen addressed.

    Which matters most, age or miles, to a Hybrid battery pack?

    Are the batteries in a 100,000 mile 3 year old hybrid better or worse off then an identical car that takes 7 or 8 years to get to that mark?

    I drive 35,000/yr so this could be a real deal breaker for me next time I need a new car. A conventional car is good for 150,000 easy now, what about a Hybrid? I would love the gas savings as much as I drive, but not if the batteries don’t last. Resale doesn’t matter much to me as there is practically none no matter what I drive.

  5. Charlie Says:

    I wonder if we aren’t nearing the saturation point in terms of the limited number of people who are willing to pay the premium for a hybrid.

    I also think that when dealers flood showrooms with hybrids as John observed, the buyers will start to see greater hybrid options in terms of styling – probably a huge part of why you need to want a Prius for reasons other than good looks…and let’s face it, most people are influenced by styling unless you bought an Aztek or a Prius!

  6. Ron Patenaude Says:

    John, I think sometimes people miss the boat when it comes to a Hybrid. I own a Prius-(Toyota)For a number of reasons,1-The battery is warrantied for eight years.2-The Engineering,this is what every car buyer expects to get from there large purchases,This car starts at 22000 in the US and 27000 in Canada.I read an article before I purchased this vehicle.A Taxi owner/Driver in Vancouver had over 400.000Km and toyota gave him a new Prius so they could take his to run tests on.When was the last time you heard of a car company interested in Inproving there product before they sold the next model year.-GM,Ford,Chrysler,not in my lifetime.Some of the products used in this vehicle are used by Nasa,How can you go wrong.Thank-you for lisening.Ron

  7. Bob Brooks Says:

    Hybrid value will begin to clarify when we get reliable h’way steady speed (under 65 mph)
    MPG data for comparison with conventional cars of the same size……and reliable city MPG with careful driving vs. aggressive driving…again vs convential cars. We then need MPG data from the best of the new non-hydrids such as the 1.33L Toyota Auris with stop/start feature. Battery replacement cost could be a killer but is yet an unknown.

  8. Tom Martin Says:

    I believe that the Prius battery warranty is for 8 years or 100K, whichever comes first — except in California where the warranty is for 150K. Not sure why California gets the added mileage.

    Good question about what is more important –time or mileage?

    My guess is that with a Prius, time is more important since the battery does not have deep discharges. We have not heard about a lot of the 2003-2004 batteries being replaced and I’m sure that many have exceeded 150K.

    I also speculate that the reverse will be true for plug-in hybrids and electric cars where the batteries may experience deeper discharges. That may be the Volts biggest hurdle — finding a battery that can last 150K.

  9. Tom Martin Says:

    Speaking of hybrids, I’m underwhelmed with the Honda Insight. It only costs a couple thousand dollars below a Prius, but gets about 6-8 mpg less.

    It also appears that it has less power and is smaller (with being 6’1″, I may have headroom concerns.)

    I also don’t like that it’s can’t drive on electric motor alone.

    When the new Prius arrives, the differences will be greater yet.